China eyes sustained economic growth through reforms

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Chinese Premier Li Keqiang on Sunday pledged to continue reforms to attain the economic growth target of about 6.5 percent this year despite challenges ahead.

The annual government work report, delivered by Li at the opening meeting of the annual session of the National People's Congress (NPC), China's top legislature, set the GDP growth target at around 6.5 percent, or higher if possible in practice.

The target, which Li said is "realistic and in keeping with economic principles," is the lowest for more than 20 years for China. Nonetheless, China remains one of the world's fastest-growing economies.

The target will help steer and steady expectations and make structural adjustments as well as help achieve the goal of building a moderately prosperous society in all respects by 2020, Li said while delivering the report at the session, the first since Xi Jinping was endorsed as the core of the Communist Party of China (CPC) Central Committee last October.

Li called for uniting more closely around the CPC Central Committee with Xi as the core and working hard to fulfill development targets.

2017 is of crucial importance for the country as the CPC will convene its 19th National Congress in the second half of the year to elect a new leadership for the next five years during which Xi's vision of a well-off society will be achieved.

Nearly 3,000 NPC deputies listened to Li's report at the meeting chaired by Zhang Dejiang, chairman of the NPC Standing Committee, along with Xi and other leaders.

GROWTH TARGET ACHIEVABLE

Li also announced that in 2017, China will keep its CPI increase at around 3 percent, and create more than 11 million urban jobs with a registered urban unemployment rate within 4.5 percent.

The country will also reduce its energy consumption per unit of GDP by at least 3.4 percent.

"An important reason for stressing the need to maintain stable growth is to ensure employment and improve people's lives," Li said.

Last year, China's GDP reached 74.4 trillion yuan (10.8 trillion U.S. dollars), a 6.7-percent growth, outpacing most other economies and contributing more than 30 percent of global growth.

Despite challenges, China created 13.14 million urban jobs and increased per capita disposable income by 6.3 percent. About 12.4 million people shook off poverty.

Noting that China must be ready to face more complicated and graver situations including sluggish world economic growth and growing trend of protectionism, Li expressed his confidence that difficulties will be overcome as the country has a solid material foundation, abundant human resources, a huge market, and a complete system of industries.

National lawmaker Zhang Zhao'an called the target "reasonable, pragmatic and reachable."

"You have to take into account the large base figure of China's economic aggregates. The moderate adjustment of the target signals a greater focus on the quality and returns of economic growth," said Zhang, vice president of Shanghai Academy of Social Sciences.

SUPPLY-SIDE STRUCTURAL REFORM

Supply-side structural reform will be given priority in China's development, Li said.

According to the report, efforts will center on a variety of areas,including streamlining administration, reducing taxes, further expanding market access, and reducing ineffective supply while expanding effective supply.

Comparing the reform as "the struggle from chrysalis to butterfly," Li said China must press forward with courage and get the job done.

"China's endeavors to deepen reforms, improve government efficiency and encourage innovation and entrepreneurship have had positive impacts on the economic sector," Zhang Zhao'an said.

To be specific, China will further reduce steel production capacity by around 50 million metric tons and coal capacity by at least 150 million metric tons this year, the report said.

It also highlighted cutting excess urban real estate inventory, bringing down the leverage of enterprises, reducing costs for enterprises and strengthen areas of weakness including poverty eradication.

China will pursue a more proactive and effective fiscal policy.It has set its government fiscal deficit this year at 2.38 trillion yuan, or 3 percent of its GDP, an increase of 200 billion yuan over last year.

It plans to invest 800 billion yuan in railway construction and 1.8 trillion yuan in highway and waterway projects, and begin construction on another 15 major water conservation projects.

This year, the government aims to reduce the number of rural residents living in poverty by over 10 million, including 3.4 million to be relocated from inhospitable areas. Central government funding for poverty alleviation will be increased by over 30 percent.

Meanwhile, the report said, transforming and upgrading the real economy through innovation will be another focus of work.

"China's population dividends are declining, but its institutional dividends are increasing," Zhang said.

GLOBALIZATION

Despite an increase in anti-globalization sentiment and attempts to reverse the trend, Li Keqiang reassured that China opposes protectionism in its different forms, and will work toward a deeper and higher level of opening up.

Li's remarks echoed President Xi Jinping's January speech during the World Economic Forum at Davos, Switzerland, in which Xi said pursuing protectionism is like "locking oneself in a dark room."

In this spirit, Li said, China will push ahead with the Belt and Road Initiative, for example, by accelerating the building of overland economic corridors and maritime cooperation hubs, and deepening international industrial-capacity cooperation.

The initiative, proposed by China in 2013 with the aim of connecting Asia with Europe and Africa along ancient trade routes, has yielded infrastructure projects of all sorts, economic and trade cooperation zones, and jobs.

China will also make big moves to improve the environment for foreign investors, including making service industries, manufacturing, and mining more open to foreign investment, encouraging foreign-invested firms to be listed and issue bonds in China, and allowing them to take part in national science and technology projects, according to the report.

SOVEREIGNTY AND SECURITY

This year marks the 20th anniversary of Hong Kong's return to the motherland, and 18th anniversary of Macao's return.

"We will continue to implement, both to the letter and in spirit, the principle of 'one country, two systems,'" Li said, stressing the principle will be steadfastly applied in Hong Kong and Macao without being bent or distorted.

The notion of "Hong Kong independence" will lead nowhere, he warned.

He also voiced opposition against and resolution to contain separatist activities for "Taiwan independence."

"We will never tolerate any activity, in any form or name, which attempts to separate Taiwan from the motherland," Li said.

In addition, China will continue to deepen reforms in national defense and the armed forces.

It will strengthen its maritime and air defense as well as border control amid efforts to safeguard its sovereignty and security, according to the report.

"We will boost military training and preparedness, so as to ensure that the sovereignty, security, and development interests of China are resolutely and effectively safeguarded," Li said.

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